There’s a lot happening in the market right now.
The Dow is at a new high, there are runaway stocks causing irrational exuberance, and yet, unemployment claims are on the rise. How can this be?
To make sense of this whirlwind situation, today’s show is a solo discussion of how improving judgment and using mental models can protect us against risks and short-term thinking. We also touch on the so-called death of cities, and what this means for real estate investors.
This episode is for you if: you’re confused about why the stock market is doing so well while the world definitely isn’t, you’re getting caught up in market trends and wondering if you should make a risky investment, or you’re curious about whether cities will make a comeback after this is all said and done.
Here’s a list of topics we touch on during the episode:
- Why the stock market is not the economy
- How market speculation becomes a self-fulfilling prophecy
- Investmentainment – what it is, and why you should be wary
- The difference between investment marketing and investment education
- The cognitive biases that can cloud our judgment and how investment marketers take advantage of these biases to convince us of certainty and easy money
- Six factors that make you a good investor
- Everyone thinks they’re a genius right now because valuations are high across the board – but that doesn’t make your decision process reliable
- The danger in letting investment platforms and marketers think for you (and what to do instead)
- The one question you need to ask yourself that might save you from a costly investment mistake
- Actions that empower you to cut through the noise and pick the right investments for your situation
- Why, according to history, it’s likely that cities will continue to prosper despite some population decline
- Where to look for good real estate deals as an investor
If you want to dig into behavioral finance, mental models, and how to think about investing, start with these interviews:
- The Psychology of Money, with Morgan Housel
- The Thinker’s Guide to Market Volatility, with Dr. Steve Wendel and Sam Lamas
- The Emotional Complexity of Money, with Dr. Dan Ariely
- 10 Questions to Master Successful Investing, with David Stein
Resources Mentioned:
- Southern and Western Regions Experienced Rapid Growth This Decade | Census.gov
- Cities Will Survive Pandemics and Protests | Bloomberg
- How Life in Our Cities Will Look After the Coronavirus Pandemic | Foreign Policy
- How Will Cities Survive the Coronavirus? | New York Times
- Will Coronavirus Be the Death of Cities? Not So Fast | Wall Street Journal
- Why Should We Ever Return to Living and Working So Close Together? | New York Times
- Ask Paula – I’m an investor who likes volatility; what should I buy? | Podcast Episode (referenced)
- 31-Day Challenge | Daily thought-provoking emails
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